Effects Of GST On Logistics Industries

India's greatest tax reform - replacing an array of provincial duties with a nationwide goods and services tax - is transforming the logistics industry in a country where moving stuff around is notoriously difficult to do.

India's greatest tax reform - replacing an array of provincial duties with a nationwide goods and services tax - is transforming the logistics industry in a country where moving stuff around is notoriously difficult to do.

Several analyses and studies have been published to predict its impact as the bill has slowly meandered through the complex legislative process of our country. It has been touted as a complete game changer that would propel economic growth in the long run and change the fundamental aspects of doing business.

“At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom. A moment comes, which comes but rarely in history when we step out from the old to new…” That is an extract from the “tryst with destiny” speech delivered by Jawaharlal Nehru, the first Prime Minister of independent India, to the Indian Constituent Assembly in The Parliament, on the eve of India’s independence, towards midnight on 15 August 1947. 70 years later towards midnight on 30 June, 2017 India once again made a tryst with destiny stepping out from the old to new. This time it was the official launch of the Goods and Services Tax (GST), the most sweeping tax reform for nearly 70 years.

It is a well-accepted fact that there would be a direct and immediate impact of GST on the logistics industry that includes customs clearance, freight forwarding, warehousing, distribution and supply chain industry in the country. It is also truly estimated by the government that GST would save companies around $14 billion because it would allow them to organise their warehouses and supply chains more efficiently. Firms can now move to demand-based “hub-and-spoke” models used globally, rather than operating state-by-state. As a result, there would be price corrections owing to reduced logistics cost, reduced transaction costs and transit time, and hassle-free transportation for domestic as well as international shipments. Hence, the beneficiary would be Indian manufacturers, exporters and end users owing to Indian products being very competitive.

We know that in India transporters and logistics professionals are bound to pay bribe to local police, traffic and other local admin bodies even you are doing proper paper work. But GST has crack the bounderies of kachcha maal and pakka maal. It makes us safe to transport goods all over India without any permit. In point of view of a Logistics Professional it great relax from cheating behaviour of local admin and police.